You can always rely on Travers Smith for revenue growth; the City independent has posted its ninth consecutive year of financial expansion. Although, in many ways, the 18% uptick in turnover to £146.9m was a triumphant bounce back from 2016/17’s results, when revenue inched up just 4% against a backdrop of Brexit uncertainty.
The revenue increase is more impressive when considering that only £900,000 of the £146.9m figure was generated overseas – in Travers’ small Paris branch – emphasising the firm’s strength in its domestic market.
Profit per equity partner (PEP) smashed the £1m barrier, hiking 24% from £970,000 to £1.2m. The rising PEP was somewhat influenced by a slight reduction in equity partner numbers, however, falling from 50 last year to 47 this time around.
Travers has long been seen as a strong player in the private equity space, however, the firm has seen positive performances across the board. The firm’s disputes practice in particular has been active and is now the largest individual team by headcount.
The group is due to act on a major mandate in October, representing Icelandic lawyer Jóhannes Jóhannsson in his dispute against property tycoon Robert Tchenguiz. A key ongoing matter is the representation of Hewlett-Packard Enterprise in its £3.4bn claim against Autonomy founder Michael Lynch and its former chief financial officer Sushovan Hussain. The case, which has been running since 2015, is due to conclude in early 2019.
As expected, private equity has also been a significant source of business. Led by practice head Paul Dolman, the firm assisted long-standing client Bridgepoint on the £1.5bn sale of food chain Pret a Manger to JAB Holding Company in June.
In mainstream corporate, Travers punched well above its weight in July by advising Micro Focus as it sold its open-source software business SUSE for $2.5bn with a team led by head of corporate Spencer Summerfield.
‘Despite the uncertainty of Brexit, clients had money to spend, high-quality assets to sell and disputes to settle.’
David Patient, Travers Smith
Managing partner David Patient (pictured) and senior partner Chris Hale form an experienced duo at the helm of Travers Smith, with the former in place since 2015 and the latter since 2013. In January this year, Patient was re-elected for a second three-year term after he stood unopposed.
You’re not a fan of being regarded as a ‘private equity player’ and want more recognition for disputes work. Why do they get less recognition?
David Patient: The problem that disputes lawyers have is M&A lawyers are announcing deals every five minutes because the transactions are done in a few days or months. When you are in disputes you might be working on one big case for three years or more so you don’t often get the recognition. The legal press often refers to us as something like ‘the PE stalwart’, but we have an incredibly strong disputes practice.
We have also had real success in the infrastructure M&A space. Our regulatory practice was incredibly busy, especially on MiFID II work. Real estate and pensions also had very strong years.
How do you reflect on the year you’ve had?
Patient: The results exceeded expectations. When you set a budget at the beginning of the year you take into account what you think is potentially going to happen. The previous year had been better than we thought, but it was immediately following Brexit. It was very hard to see how this year would turn out, but it ended up being better than we hoped. We knew by around Christmas that it would be a very strong year.
Despite the uncertainty of Brexit, clients had money to spend, high-quality assets to sell and disputes to settle. It was either that or a case of people thinking to themselves: ‘I am Brexit-proof.’ We had a lot of selling mandates from the private equity houses and a lot of disputes work gets referred to us. We have this position in the market of not being a competitor of most of the top European and US firms, which helps.
What kind of market influences can you see impacting the year ahead?
Patient: Brexit is the key one. We have kicked off our new year very busy and we expect that to continue through to the end of September. After that, it depends on the mood music of our clients as they get back from their holidays.
I wish I had a crystal ball! It’s anyone’s guess. I certainly think in the next couple of years we are going to see some Brexit headwinds and that will have an impact on law firm business, transactional activity in particular. Having said that, we are very flexible and nimble so I back us to roll with the punches.